NONPROFIT SOLICITATION, ARE YOU IN COMPLIANCE?

Raising awareness for your organization and increasing opportunities for donor support is fundamental to the success of your mission. The digital age has opened a world of possibilities, and with it, a realm of legalities that can baffle even the most diligent and well meaning among us. If you have a “donate now” button on your website, reach out to supporters beyond your home state, and/or plan to, you have entered the complicated and confusing process of properly registering your nonprofit. Nonprofit solicitation registration is a process that can vary from state to state. Knowing which forms, fees, deadlines, and even exemptions required to maintain compliance and not compromise your charity registration status, can be daunting.

While many of these regulations have been on the books for some time now, many nonprofits have ignored them without incidence, but things have changed. These days, the IRS requires nonprofits to annually disclose state fundraising registrations for each state they sought/received support in. Currently 39 states, including the District of Columbia, require nonprofits to register with their state agency, not doing so, or not doing so correctly, can be costly.About half of the state agencies also require ever changing fundraising disclosures be communicated to donors in a variety of formats, from solicitation letters, to receipts, to verbally when professional fundraisers make contact with supporters, via telephone or in person.Let the nonprofit experts at NPSS navigate the complexities of nonprofit fundraising registration. Contact us now so you can move into the New Year with the peace of mind needed to fully focus on your organization’s mission, while we guarantee 100% compliance.

The 6 Myths of Nonprofit Solicitation Registration

Some 40 states require registration by non-profit organizations prior to soliciting funds within their state.  Much of the relevant legislation was written before the expanded role of the internet in fundraising.  States continue to adjust their requirements with significant penalties for failing to comply. With 40 different sets of regulations confusion is inevitable.  Here are a few common misconceptions:

Minimum Receipt Thresholds .  Many states provide an exemption for organizations which raise less than $25,000..  It’s important to note that this threshold is based on the total receipts of the organization, not just the amount raised in a given state.

Solicitation Online Counts   Online solicitation using website, social media, email and other electronic means is treated in various ways from state to state.  In general each organization is required to register in each state in which it solicits donations.  The internet which reaches many states may trigger registration requirements in some or all of them. Registration must be done in advance of solicitation.  A careful reading of each state’s requirements in necessary to ensure compliance.

Electronic Connections Track Non-Compliance The increasing connection of data makes it easier for state regulators to track agencies which file 990s and fail to obtain state charity registration. Non-compliance is increasingly less likely to go unnoticed.

Exemptions Must Be Requested . Most states provide exemptions for some types of organizations, but generally these exemptions are not automatic.  An agency must apply for an exemption and have it granted to have effect.

Grant Requests are Solicitations. – Grant applications are considered solicitations in most states, and the resulting grant amounts may be considered part of the income for threshold purposes.

Penalties Can Be Significant While state registration fees are generally low, the penalties for non-compliance can be severe.  If an organization’s online solicitation triggers a requirement to register, failure to comply can have significant financial consequences.

We are Experts in State Charity Registration

We specialize in helping organizations establish and maintain compliance with each state’s requirements.  Leave the hassle and worry behind.  Our service is low cost with a fixed price.

Call us today at 885-835-0877 to discuss how we can help you.

Internet Fundraising Rewards and Challenges

With the increase of online commerce and online banking, it is no surprise that online giving has increased.  A recent study found that online donations increased by 13% from 2014 to 2015, and monthly giving increased by a whopping 32%.  The web has opened a vast array of fundraising initiatives from peer to peer requests, to online matching drives, Facebook campaigns, Pinterest boards, online auctions, video presentations, and of course direct email solicitations to mention just a few.  Using these approaches, online fundraising has provided an efficient and effective tool to build support for their programs.

At the same time that the web has become a fundraiser’s friend, it has become a fertile ground for scams of all types.  In the face of fraudulent fundraising practices, many states have enacted nonprofit solicitation registration laws to ensure some basic regulation of nonprofit solicitation.  At the federal level, charities seeking to accept donations which confer tax deductible status require an organization to provide annual reports of their status and activities.  Most, but not all states, require state charity registration and regular reports of nonprofits which solicit or accept donations within their state.  It is here where the challenge for organizations takes a toll.  Each state has established and maintains its own set of nonprofit solicitation laws, regulations and policies for the regulation of charitable organizations which solicit in their state.

A common misconception is that an organization must register with the federal government and only in the state in which it maintains its headquarters. The fact is that each organization must comply with the state charity registration laws in EVERY STATE in which it solicits donations or receives donations. To be clear, this means that if your organization website has a “donate now” button you are likely to be required to register in all states that have state charity registration laws.

While there has been some attempt to create a Unified Registration Statement, now accepted by 31 of the 39 states and the District of Columbia which require state charity registration, in most instances, it covers only initial registration and does not cover annual renewals.  Further, 16 states require additional information beyond that conveyed by the Unified Registration Statement.Each state defines conditions under which some organizations are exempt from reporting and disclosure requirements.  The National Association of State Charity Officials (NASCO) developed the “Charleston Principles” to help organizations decide when their website create a responsibility to register.  However, several states do not follow these principles and they are not binding on any state.

In sum, the internet has provided a vast array of creative and effective tools for efficient fundraising for nonprofit organizations.  Governments at the federal and state level has stepped in to ensure some level of protection against scammers and in doing so have created a regulatory maze of state charity registration requirements.

NPSS Corporation provides consultation in establishing compliance for your organization with state charity registration laws, organizes the required reports and ensures timely submissions.   Take full advantage of the fundraising value of the internet and email communication and let NPSS Corporation with its low fixed rate pricing, ensure worry free success.

Form 990 – More Than Just Another Form

Form 990 is required by the IRS of most nonprofit organizations as a requirement of being classified as able to receive tax-deductible contributions. Its purposes include a review of the finances, legitimacy of the uses of funds donated for charitable purposes, organizational leadership, and a report of the activities and functions of the organization. The Form 990 is of interest to the IRS in enforcing the tax code, and to the public who can read it online as a means of evaluating finances and programs.

As with most tax forms, the Form 990 has the potential to be confusing, and in 2016 the IRS reported that a third of paper forms submitted contained errors. For organizations on a calendar tax year the reporting deadline is May 15th, and for those with other tax dates the reporting deadline is the 15th day of the 5th month following. According to the IRS nearly 1/3 of all Form 990s submitted on paper contained errors. The IRS has made changes to many of the fields on the form and encourages the use of online submission to avoid follow-up contact from the IRS.

If you are a newly established nonprofit you must file even though you may not have received your IRS determination letter. You must file using one of three forms depending on your revenue. Some organizations, but not all, can request a six-month extensions organization’s reporting deadline. Failure to submit Form 990 can result in financial penalties and ultimately revocation of nonprofit status. Further, many states require that a copy of the Form 990 be submitted to them as well.

Nonprofit Support Services is dedicated to helping organizations focus on their service mission by ensuring accurate, complete, and timely completion of the Form 990. Visit our website for more information or give us a call at 888-835-0877 for a free consultation.

What You Don’t Know Can Hurt You!

There is great advantage to gaining non-profit status from the IRS that makes donations to your organization tax deductible, allows you to not pay sales tax on items purchased and other perks. But, with the benefit of this status comes some requirements.

In addition to annual nonprofit solicitation registration filings with the federal government, most states have their own filing requirements.  One surprise to many nonprofit administrators is that state charity registrations are required in every state in which donations are solicited.  The federal filing requires a certification of compliance and list of states for which registration is completed.  After some highly publicized abuses, many states have established more aggressive enforcement and penalties for non-compliance.

With the advent of the internet nonprofit solicitations are frequently made well beyond the borders of the organization’s home state.  Note that the requirement refers to nonprofit solicitation without regard to actual donations received.  39 states and the District of Columbia require state charity registration.  The goal of each is to protect the public against fraud, and to help citizens make informed decisions on donations.  Many states provide the nonprofit solicitation registration data online.

Apart from basic goals, there is little uniformity across states.  Each state establishes and maintains its own laws and process which may change year to year.  In addition to the initial state charity registration, most states require annual reports with a widely varying data.  Each state offers exemptions to all or some of its registration and reporting requirements to certain types of organizations based on function, size, or dollar volume.

Each organization which holds nonprofit status should:

  • Review its solicitation practices,
  • Identify the states in which solicitations are made,
  • Research the requirements for nonprofit solicitation registration, and reporting
  • Take steps to ensure ongoing compliance.

Nonprofit Support Services recognizes the burden placed on organizations by the state charity registration patchwork quilt. NPSS provides a low cost, fixed price service to obtain and ensure ongoing compliance for each state.  For many organizations this service provides ready expansion of fund raising into new states and for all organizations it provides regulatory peace of mind.

Top 5 Smart Ways to Raise Funds for Nonprofit Organization

Fundraising or asking for a donation is the activity to raise money for a nonprofit’s specific purposes. For a successful fundraising, you need to understand what are your nonprofit’s goals and objectives, and the various fundraising options that are available.

It is very difficult to convince donors. Nobody wants to waste their hard earned money on things they don’t have any idea about. They might ask, “Why?” And we might not have a great answer.

You can help them realize that they are contributing to a valuable cause. Once donors believe that your cause truly matters, they want to become part of your journey.

A nonprofit organization works for a specific group or cause that is beneficial for the community. There are different types of nonprofit organization such as educational, charitable, artistic, religious and, scientific.  No matter what type of a nonprofit it is, they are meant to contribute to the society and not to make a profit. If you want to take your fundraising efforts to the next level, we have the top 5 fundraising tips for nonprofits that actually work.

Top 5 Smart Ways to Raise Funds for Nonprofit Organization

Attract People for Fundraising

If you really want to increase the funds for your nonprofit, you need to grab the attention of more and more people. But the question is how you can motivate people to donate to your organization? There are few things you should consider in this regard:

  • You need to identify the prospects- Target the people who you want to invest or who have a strong belief in your organization’s services.
  • Educate and cultivate your target audience- The best way to educate and cultivate prospects is to invite them to be a part of your organization’s mission. Invite and engage them with different nonprofit activities such as river cleaning, blood donation drive, delivering food and water to those in need. These will help them to better understand your work and they will be inspired to give.
  • Let people know how exactly their donations will be used.
  • Put a “Donate Now” button on your website so visits to your website can equate to donationsl to dollars.
  • You can send an email newsletter or develop text message campaigns to engage donors.
  • Appreciate and recognize donors, and involve them more deeply in your work.

Research Your Donors

If you want people to truly support your nonprofit cause, it is important to know your donors. You need in-depth research on the kinds of people who you want to donate to your nonprofit. The following are some questions you need to answer to research your target donors:

  • What are their perceptions of nonprofit organizations?
  • What do they do when they feel motivated?
  • Do you already know some potential donors?
  • Do they really care about your cause?
  • Do they have money to donate?
  • Have they donated in the past?
  • What are donor’s common fears, concerns, and objections about giving?

Collecting important information about donors help you create a personal profile, allowing you to personalize the message you send them.

Promote the Fundraising Efforts

After researching prospective donors and building a good image in people’s mind, the next crucial step is promoting the fundraiser. It is an easy, effective and useful way to attract more people to donate to the cause. There are plenty of ways you can promote your fundraising efforts, which include the following:

  • Word of Mouth – Word of mouth is the best advertisement. It is one of the basic and most efficient ways to promote nonprofit’s fundraising efforts.
  • Social Media – Social media channels such as Facebook and Twitter are the best ways to reach a large number of people with the least amount of time and money. By developing compelling content and keeping the message consistent, you can reach people who are interested in making a contribution to your organization’s cause. Social media has the power to convert your product or service into a brand. You can create a campaign, like #givingtuesday which is very famous on Facebook. Moreover, investing in Facebook ads is the best way to catch the attention of targeted donors for raising funds.
  • Internet- The Internet is yet another powerful medium to appeal to potential donors for funds. You can write articles and blogs on your website, create striking pictures and videos, and attract prospective donors through rich, compelling content.
  • Brand Ambassador- You can recruit a famous celebrity such as actor, musician, business person or politician for your nonprofit organization. It will help your nonprofit to attract wealthy donors.

Build Your Brand Equity

Building your brand is difficult but not impossible!

If nobody knows about your organization, how will you raise funds for the mission? You need strategic planning, time, effort and persistence to build your own identity. No matter how talented the people you have and how good your cause is, if it is unbranded, it’s of no use.

Create a logo, name, compelling image and video, font, quality website, and copy that support with your brand standards. This will not only increase brand recognition and awareness, but your potential donors feel safe that they are contributing for the right cause. A branded nonprofit builds confidence, trust and motivates people to donate their money.

Inspire More Donations at Your Fundraising Events

Fundraising events are powerful ways to engage with donors, grow your community and celebrate your nonprofit’s mission with large audiences. But, how will a fundraising event help to raise money for your nonprofit’s cause? The following are popular ideas to increase giving at your next fundraising event.

  • Mobile donations are great ways to raise even more money at your fundraising event. Encourage your supporters by providing them the option of a mobile donation.
  • At your event, auctions, raffles, and games are the best ways to generate more money for your cause.
  • Showcase your work to your community of supporters at the event. Showing live demonstrations, telling appealing stories and showing emotional advertisements are great ways to make a big difference.
  • You can secure future support by showing your appreciation to donors. Make the donor feel special by treating them like a VIP. Thanks them for their valuable involvement for the cause and always keep in touch with your sponsors.